Ever wondered what distinguishes a great business from an ordinary one? or what makes a start-up a true winner? well there is a million dollar question right there. If there was a ’success-o-meter’ that proposes the likelihood of a start-up succeeding versus failing, I am sure all the VCs and investors will own one regardless of how much it costs.

I can’t tell you i have the answer to what dictates whether a start-up will succeed or fail, and i doubt there are people who will definitely tell you that this is the formula to determine that. However there are certain telling signs that are common with successful start-ups and I will be sharing the most common here. If you know of any others, please feel free to add them down in the comments section. I am sure we can all learn from each other. I once heard Guy Kawasaki say that in the business of starting up companies, no one is an island, no one knows it all or has all the answers…and I absolutely agree with him.

Naval Ravikant of venture hacks once pointed out that for him and many other investors, the first thing he looks at is the team behind the idea and then the idea. Other people I have heard say the same thing are Chris Sacca and Martin Zwilling amongst others. What does this say then, team is more important than product?Personally I believe the two must go hand in hand if you are to be successful. But last week I was having a conversation with Ken Foster, a serial entrepreneur based in London, about the key to a successful start-up and the one thing he said that hit home the hardest was “a great team can make a crap product work but a crap team will ruin a great idea”. So the first on my list of things I believe make a start-up succeed is the team.

1. The Team: A start-up that will succeed will have able people running each and every aspect of the company. It will have dedicated people who are willing to put in extra effort if it is needed and will do anything to witness the start-up succeed. These people will also possess some experience in the role they have taken up. Now as far as experience goes, some rookies have done awesome with several start-ups, however, it is important to have a good mix of experience with your gen y imports. It is absolutely invaluable, the effect experience can have on the fortunes of a new company. Infact most investors you will talk to will tell you they don’t care about your idea, i have been told severally “Tolu, I don’t invest in ideas, I invest in people”. go figure.
2. The product/service: If you are building a start-up, you better make sure whatever you are offering meets the needs of the public…if not, you have wasted money, effort and valuable time. Regardless of how smart or innovative you are, you better survey your market and ensure that your product/service is solving a problem that already exists. Most VCs you pitch ideas to will often ask you: what is the problem? what is this product? and how does it solve the problem that exists? They are only asking because they have learned from experience that if it isn’t broke and you try fixing it, the chance of you failing is alot more than you succeeding. Steve Jobs is regarded as a great thinker, an innovative entrepreneur and alot of people look up to the lad but he did hit his head against the rock with NeXT Computer didn’t he? people weren’t ready for it and he failed to understand this, hence the failure. In a nutshell, your product/service better be satisfying some hunger or you will crash and burn.
3. The Market and your marketing strategy: Some products work for a certain market but will barely make a sale in another. If you come up with some sick Nike-esque kicks designed for women in their 50’s ( i am sure no one is dumb enough to do this, right? well you’ll be surprised), I am sure, so sure you will never succeed in business generally… well, except if you go re-tune your thinking methods! A start-up that will succeed makes sure their market will respond to their product and they come up with genius ways of selling it to them. I was watching CNBC last night and they were discussing Snuggie (the blanket thing with sleeves you see them advertising on tv), and believe it or not the guys that came up with that stuff have banked tens of millions of dollars in the little time they’ve been in business. They took an idea that is really not out of this world, but sold it to their market so brilliantly. They picked the beginning of the fall season to start advertising on TV and their ads were so novel and ‘cool’ that everyone found it appealing. I know people who bought the thing just because they liked the commercial on TV! In a nut-shell, your marketing strategy goes a long way in deciding how successful your business will be.

These are the top elements (in my opinion), that I have seen successful start-ups possess. If you know of any other, feel free to share. I am always looking to learn.

With the state of the economy at the moment, it’s no surprise that I am a honorable advocate for the art bootstrapping as a means of funding your start-up. It’s not that there’s no VC money to be spent or there isn’t alot of it being given away at the moment, it’s just that as a new entrepreneur, your chances of getting your claws on them are very close to zero. Many investors are now shying away from investing in ‘untested/untried manpower’ so they are all justling to throw more money the way of household ventures, even if they don’t need it as much.

Bootstrapping for those who are stuck is the process of getting funds for your business without the aid of outside forces. These outside or external forces if you like, are the VCs, bank loans, Angel investments e.t.c. By choosing to bootstrap, you ultimately avoid debt and financing any equity. Besides these perks, you also get about sole control of your business, you won’t need to listen to any ‘board of investors’ constantly blowing up your blackberry, telling you what to do and when  to do it. If you are not so sure about the chance of a business succeeding, perhaps it will warm your heart to know that Dell, Cisco, Oracle, ebay all started out by bootstrapping and not taking any early venture fund.

Ways to Bootstrap: There are many ways of go about bootstrapping that it would be unhealthy for this article if I list each an everyone I have heard of or come across, but the most popular ways are what I will share.

• Self-finance your Start-up: Pretty self explanatory this one. Many start-ups do not need hundreds of thousands of dollars to get off the ground. In fact most of the Start-ups I have worked with and know of started with less that 20k. I realize that it all depends on the industry and the market but usually, one can get a business off the ground locally.You can dig into your saving, put your credit card to use(think twice), take out a mortgage/loan, get family and friends to pitch in and you will have enough to start things off.
• Call on the ‘negotiator’ in you: Easier said than done, I know. But as a business owner, I will advice you to learn and sharpen your negotiating skills, if it isn’t already. There will be times when you are starting off when you might have to convince yourself and few employees to pass on the paychecks so you can spend the money on growing the business. You might have to negotiate a payment structure with your suppliers, such that you pay a bit later or when the business has started making profits. As an entrepreneur, you must be bright and innovative, or you will fail.
• Outsource, Outsource, Outsource. I fully support outsourcing, especially when you are just starting off. If you do this smartly, you will cost alot of cost. Salary cost, rent cost, gas, electricity and so forth. Isn’t this what you want? Infact using a freelancer for certain aspects of your operations isn’t such a bad idea and often times they are on for the short term and aren’t so expensive if you look in the right places.

When is it time to beg? I don’t exactly mean getting on your knees with tears rolling down your eyes, asking for a break from some investor (well except if it is what you have to do!). But usually as your business grows, there comes a point on that growth curve when you should call in the big guns.

• When demand is greater than supply: This is an obvious choice for numero uno on the list. As soon as you notice that more people are asking for your service/product more than you can offer, it’s best for you to look for ways of funding your venture. If you have successfully brought your business to this point, then kudos to you. You also can be rest assured that with a growing business that is showing promise, the likelihood of you securing VC funding dramatically increases.
• When the economy favors your market: When you realize that most people are now starting to patronize your niche industry, then you must do yourself and business a favor by expanding your capacity. If you are blackberry app developer and you suddenly notice that more people are starting to switch from iphone to blackberries, then you should read into that trend and take advantage. That trend means there will be more people using the blackberry and hence more people demanding the apps. This is when you must secure some funding and expand your practice.
• When profit/cost ratio keeps jumping: If you notice that your even as your selling price increases, the demand for your service/product is still unwavering or increases, then please, please, beg for money to expand. If you are not too keen on seeking funds, then atleast shoot me and email and I will gladly invest the little I have into your venture. (no, no kidding!)

Finally, be careful who you ‘beg’. A lot of people look online and find a list of VCs that have invested several millions into some start-ups and just immediately send them a plan. You can’t and shouldn’t do that. Do your research and make sure the VC or investor you choose knows alot about the industry you are in. Don’t email a VC whose primary sector in biotechnology asking for help with your new social media. It doesn’t work like that. Be sure they have your back, be sure they have experience with your niche…but most importantly, be sure they are trustworthy!

Before I started this blog, Generation – Y Startup was a completely offline venture. I simply spread the word about what I did by word of mouth, flyers, handing out business cards e.t.c. I had promised myself that I wasn’t going to get into blogging just for the sake of it. I wanted to make sure I was equipped enough on the topics I was going to be talking about. I now own two companies (still very young and growing), I have met with several angel investors and VCs, pitched my ideas on exactly 9 elevators, 15 car parks and about 23 times at the end of several startup events. It was only after all these that I decided it was time to move my venture online. I figured I had real understanding of what I will be saying; I now know the pain and joy of building a startup from nothing.

I started genystartup.com a few days after I had completed a test social networking website (I was testing out dolphin by boonex software). It is barely a month old but I have been lucky enough to gain a few followers already. I have posted some worth-while articles (so I have been told, I don’t blow my own horn) and I am proud of how things are getting on with Generation – Y Startup. It might be my first blog, but I am always surrounded by bloggers and have spoken to so many to realize that a blog needs a lot of time to grow, several months they said before you get at least 100 uniques/day. Somehow after my first two posts, I was already averaging 100 uniques. Now for a lot of people, this might be very, very small, but for me…It was quite a number. I live in Maryland and I can’t brag of knowing Chris Sacca, Guy Kawasaki or a friend at techcrunch who at the click of their mouse can channel tones of readers to my blog, so I do appreciate those 100, thanks you. I refused to create ads to promote my website, not because of cost but because I am always striving to convince myself that a venture truly can become legendary without really spending money.

I totally understand the power of social media, and while I and some of my friends (working for me) use it and other means (SEO, link creation e.t.c.) to grow our clients’ status online, I don’t ever really try to use it for Generation – Y Startup. I want my readers to really be new entrepreneurs willing to learn from my mistakes and right-deeds, from my failures and successes, not just anyone who barely cares about my topic of discussion because I want to drive my traffic so high. But back to my reason for this post, I believe the power of twitter is truly remarkable and while I was about to lay in bed to one night (as I have just finished writing ‘Business Plan 101 – Your first business plan’ ), I thought of the several reasons why I needed to share with my few followers the power of social media and especially twitter, as per what I had noticed 2 nights before.

It was just another Friday in twitter world and if you are an avid twitterer, you know that means only one thing: followfriday! It was 3a.m. eastern time and I had just read an article about a company called startup2startup (@startup2startup) and the effect it was having on new entrepreneurs. Since this is my niche, I decided to follow the company and its founder, Dave McClure (@davemcclure). I was getting set for bed so I decided I’ld put up some people who have influenced me that week and I included @davemcclure on my followfriday list. I woke up the next morning, read my emails, checked out the Liverpool football club website and smiled at the news Fernando Torres had signed a new deal…awesome! And then I pulled up my tweetdeck. Few minutes later I realized Dave McClure had decided to follow me back. I went about my business and completed my tasks for a client when I just decided to get back on and re-read this post I had just put up (Have you got what it takes to be an entrepreneur?), just to make sure again there were no spelling errors and what not. I realized the post had been re-tweeted 15 times. That was strange as I only usually averaged 3 re-tweets per post, so I looked on tweetdeck and realized @davemcclure had retweeted the post and the traffic that came pouring in after that was ridiculous.

The point of this post is for no other reason but to point out that the traffic that came in was not just traffic, but real readers. They were followers of @davemcclure and so were in my niche, and just like I wanted, they were people whose real interest fall into the category I covered.

Moral lesson: Twitter is a powerful platform and the retweet tool is one that not just brings traffic, but unlike other sources of traffic it brings in targeted readers, hence followers.

Special thanks for Dave McClure and everyone who found that article worthwhile!

]]> http://genystartup.com/startup/the-power-of-a-retweet-rt/feed/ 1 http://genystartup.com/startup/business-plan-101-%e2%80%93-your-first-business-plan/ http://genystartup.com/startup/business-plan-101-%e2%80%93-your-first-business-plan/#comments Mon, 01 Jun 2009 16:34:32 +0000 Admin http://genystartup.com/?p=155

4 years ago I was at the University of Maryland in Baltimore County, studying as hard as I could but also learning about a certain hotspot ‘fishbowl’ …the Thursday night destination for most new UMBC students and Iguana cantina, the place to be if you were quite keen on poaching the pretty freshman girls around Baltimore colleges. A few mates and I were very interested in maximizing our chances and not wasting $5-$15 constantly. So what did we do? we drew up a booklet (an e-book), called fishbowl/iguana 101 (reprints still available at the right price!!). Just like our classes at the time, we were just being broken in as far as college life was concerned so it was appropriate to label it as ‘101’.

Most new entrepreneurs know what a business plan is, but majority have not seen one let alone write it. As you must have come to realize now, a business plan is vital whenever you want to start a venture, not just for the fact that it is your visa to securing ‘trips to the pitch-rooms of VCs’, but it helps you set a plan of attack that you should try to follow to achieve your dreams for that business. I have written several business plans in the past 2 years, some for myself but majority for others. In this time one thing has become apparent, business plans vary from industry to industry and the quality of the plan always gets better with time. I was recently at a startup event in Fairfax, VA and for about 15 minutes the topic of discussion was ‘what makes a business plan solid?’We ended up exchanging ideas and thoughts even after the event was over. The truth is that most new entrepreneurs are lost when it comes to this subject matter and I think it’s necessary for me to share my concept of it. I can certainly say I am not the Zeus of business Plan County, but I do have enough experience with it.

What is a business plan? Very simply put, a business plan is a concisely written statement showing how one intends to start, operate, manage and grow a venture. Business plans are not required to be a specific length before they are taken seriously. I have seen a 100 page business plan(not including the appendix) and I have also seen a 15 page business plan that secured a lot of money in VC funding. I just want to quickly rebut that belief that a plan must be a specific length or whatever before it carries any weight.

Typically, most plans I have written have ranged from 15 – 35pages (excluding appendix) depending on what the business is. The most important things about a business plan however is that it is cohesive and you say what you need to say.

What’s the purpose of the plan? Like I mentioned earlier, a business plan shouldn’t just be a “fund seeking tool”, but it must be a carefully thought out route of how you intend to take your business to the top. You know how Rafa Benitez of Liverpool puts out his tactics ahead of champions league games? Yes your own ‘tactics’ is your business plan; it’s how you intend to beat competitors and win ‘games’.

I have found that a lot of people write plans just for the sole purpose of securing funds and this is not a good look. You should write your business plan as a guideline for you intend to make your business successful. It’s just like trying to get into med school, you study hard so you know the material and understand how to apply the skills when you get into med school, you don’t study so you get the scholarship into med school…only to lose it later for sucking. So get your priorities straight before opening up a new page on Microsoft word.

What major sections must my plan have? Typically, a business plan must cover certain specific areas, but it is up to you to decide if you need to add more information or not. But whatever you do, remember that a cumbersome business plan is never as attractive to anyone(including investors) as one that’s straight to the point and lets the reader know what exactly he/she wants to know.

Most plans that I have written and read have followed this pattern:

1. Front Page/Cover: Pretty self explanatory. It should have the name of your company, your contact information and perhaps a website

2. Table of content

3. Executive Summary: Just in case you didn’t know before, this section here makes or breaks your chances for the most part, so it must be good. I have even had situations where the VC, angel didn’t want to see my entire plan, only wanted my executive summary. So make sure you do this when you’ve completed your entire plan, and do it well!

   The Executive summary must be written to capture the reader’s mind such that they would want to dive into the other sections and keep reading. The basic elements of your plan must be reflected here. These include:

   • A brief company description
   • What is the problem? what product/service are you putting forward to solve the problem? How does it solve the problem?
   • What does your market look like? who’s your competition? why will you beat them?
   • What does the management team look like?
   • How much are you asking for? In exchange for what?
   • How do you plan on spending the funds?
   • How will you make profit? And how much?
   • What is your exit strategy
4. The Offer: How much are you asking for and what are you offering the investor in return for this funding? This is where you must be careful…a great negotiating mind should be called into play here.You never want to offer too much or offer too little. so think before you dive.
5. Business Description: This is where you will go into details of what your company will produce or what services it will offer. You must clearly state what the problem is, the solution and how your company is the right way to go. You must clearly explain your ‘modus operandi’, how the business will be run and from where.
6. Market Analysis: If you go into business without examining the market, it is similar to crossing a major road intersection in NYC with a blindfold around your eyes. You must know if the market is such that you will easily make profit, you must make sure that you know everything there is to know about the competition you will be facing and how you will overcome the threat they pose. This is vital, alot of failed businesses I know about have failed because they couldn’t handle the competition. Be wise!
7. Management Team: A solid, reputable management team will drive any business far. Here you must clearly specify the leaders of the company and their job descriptions.
8. Operations: How will the company operate. If it’s a web 2.0 company, how will you build the website? In what language will the code be written? How will it be designed? Over what period of time? You must also answer the questions of how the company will spend its 8a.m. to 5p.m. from monday to friday.
9. A marketing plan: This section of the plan will describe how you will market and promote your business. You will indicate here if you intend to use TV, Radio, Newspaper ads as a means of getting the word out, or if you will be using other means like internet marketing.
10. Financial Plan: This is the bread and butter right here. Any investor wants to know how and when he will make his money back. He/she wants to understand why you even need all that money from him in the first place. You must do a concise financial projection using Microsoft excel of how you intend to make bank over the next 5 years(typically). I found this book very useful: The small business start-up kit, plus it has a CD-rom that gets you started on your capital flow, profit & loss tables e.t.c. definitely worth the cost.

    The purpose of this section is to convince the investor and yourself that the venture makes sense from a financial standpoint. The financial section should include actual performance data for at least the preceding 3 to 5 years. If the company has no operating history, then this section will deal only with financial projections. For existing and new companies, this section will include the following:

    · First year financial projections by month

    · Five year financial forecast

    · Breakeven analysis

    · Ratio analysis

11. Appendix: This section is where you provide additional documentation that complements your business plan. It should contain all your references and other documents you used in coming up with projections of your plan, including the excel spreadsheets. It may also contain the following:

• Copies of patents, trademarks and copyrights relating to your venture
• Market analysis, polls, test experiments e.t.c. you used in coming up with your marketing assumptions
• Resumes of the management team members
• List of competitors and key observations

Once you have completely touched on all of these briefly but clearly, you are on your way. But remember , this is the last part of the plan you want to write.

The above are only what I would consider the core elements of a good business plan, but it is up to you as the ‘sailor of your own ship’ to decide what else needs to be added or not.

]]> http://genystartup.com/startup/business-plan-101-%e2%80%93-your-first-business-plan/feed/ 0 http://genystartup.com/uncategorized/have-you-got-what-it-takes-to-be-an-entrepreneur/ http://genystartup.com/uncategorized/have-you-got-what-it-takes-to-be-an-entrepreneur/#comments Fri, 29 May 2009 06:05:48 +0000 Admin http://genystartup.com/?p=136

Everyone has read tales about how rich a lot of entrepreneurs are striking it these days so as you will expect many people are joining the bandwagon. Everyone wants to build a web 2.0 company or the next 1-800-flowers. I like your thirst and yearn for success and financial security, however not everyone is cut out for it. Not everyone is designed to be an entrepreneur because there are certain traits you must possess to succeed doing this. If you lack one or two of those, you might be wasting a lot of time and money.

Certain qualities will set you aside, so not to doubt anyone or put anyone off, you should ask yourself if these are qualities you believe you possess. They always come in handy.

An entrepreneur is a leader: Marc Andreessen of Netscape once pointed out that an entrepreneur is one who makes things happen. ” If you don’t assign people and tell them what to do, it won’t get done.” An entrepreneur must be one who can take charge and make decisions, if you lack these qualities then it is hard to see how you will succeed in this industry.

Are you a visionary? The most successful entrepreneurs and those that find the most luck with investors are those that see beyond others and know where “the ball will arrive at even before the pass is made, the destination of the game”. Popular investor Chris Sacca said in an interview that he was always looking to put money into ventures but he only wants ventures that are born out of vision, solving problems that affect millions on a daily basis that have yet to be pointed out. A true entrepreneur can see an opportunity and take it.

Are you a trooper or ‘give-upper’: It is in our nature as humans to get frustrated whenever things are not going our way so I am not going to sit here and say if you get frustrated then you will succeed or fail. I get frustrated a lot, but I keep going. If you are one to give up after a set back or two then you should start questioning your career path. As an entrepreneur you will receive a lot of NO! No from potential employees, no from investors, no from potential customers even before you get any yes. If in all of this you know how to tough it out and press on then thumbs up to you. Thomas Edison failed with the lightbulb 1,000 times and on the 1,001th try it lit up. When he was asked, he said he didn’t fail, he just discovered 1,000 times not to invent a light bulb. Always view your challenges in a similar light, don’t consider you setbacks as failures, instead look at them as lessons and please DO learn!

Really, are you lazy? No BS, are you? Ask yourself this question before you try to start anything. If you are lazy, you may need to change your habits and become more useful to yourself and hardworking too. I can tell you that I have had more all-nighters since being an entrepreneur than I did when I was in college. And trust me I did have a lot in school. I was a chemical engineering major, go figure. You must possess the zest and fight to want everything to work because the business is yours, if it fails you fail. Unlike in the corporate world where your coworker can pick up your slack and cover for you, it is not the case here…if you drop the ball, no one else can call the shots so your venture is shattered. If your goods need to ship by 7am and your team is not done packaging by 1am, you don’t leave until they are done. It is up to you to make what you want to make of your business.

Teach yourself some discipline mate: If you will rather go drinking/clubbing with your buddies on Thursday-college night or thirsty Tuesday while remixing your version of Asher Roth’s I love college than finish coding your iphone app, then discipline is top of your worries. I am not saying I don’t have a remix to that Asher Roth’s hit record, infact I have 3 but I write, record and sell them to myself in the shower or in the car. I have set priorities for myself and my business is first on that list. You must teach yourself to focus on the things that matter, if you want to be an entrepreneur then act like one. Prioritize and know when it’s time for work to take precedence.

Confidence: Confidence is key when building a startup. No investor will invest in you if you don’t seem confident in what you are offering. These investors have seen hundreds of people come in asking for money and they have learned to immediately tell those who are confident and those who aren’t. It’s just like a guy going up to an absolutely stunning lady and shivering in his spine at the sight of her utter beauty. When he starts to speak, a girl can tell if he’s confident or not, if he thinks he’s good enough or not and this is what typically triggers the first stage of attraction. It’s not any different with investors, believe in what you are selling then they can believe in you.

Set goals early on and fight to achieve them: If you are able to set goals and fight tooth and nail to bring your dreams to reality, this is what you are made for. Goals usually change a bit during the pursuit but ultimately your dreams are in the same path. If you are prepared to go all the way to succeed then you can beat your chest and be proud.

]]> http://genystartup.com/uncategorized/have-you-got-what-it-takes-to-be-an-entrepreneur/feed/ 2 http://genystartup.com/uncategorized/marketing-your-new-startup/ http://genystartup.com/uncategorized/marketing-your-new-startup/#comments Mon, 25 May 2009 00:31:46 +0000 Admin http://genystartup.com/?p=114

So now your business is up and running on the internet, you have gone live, there are no bugs and you are ready for the money to start rolling in so you can pay off those loans, investments and so forth. You are now faced with selling yourself so that people know about your services. I have been asked this question a lot and so I decided to cover it on here. I had given a speech at a small gathering of hopeful entrepreneurs about 2 months ago and atleast 6 people came up to me at different times after the events and asked the same question. “I have developed and designed my website, everything is in place and ready to go, I just have one little problem…how do I get people to know about it?”

First of all I must clarify something before I proceed. For new entrepreneurs, this is very important so listen up, getting people to know about your business is NOT a little problem. It infact is the most difficult and important part of your startup as far as I know. It is difficult in the sense that it requires hours upon hours of research and work to promote your services. It sometimes will require you spending money and it could get very frustrating when you see your efforts not being fruitful (this is typically the case at the beginning for most startups). It is also the most important part of your startup because you must carefully seek and find your customer base and these are the people you want to market to. Marketing to people who don’t care about or need what you are offering will just be a waste of time and effort. As a new entrepreneur you have tones of stuff you need to spend your time, money and effort on anyway, and wasting that on anything that will be futile and can shatter you.

From the experience I have gathered over the few years I have been involved in startups, I have seen a few strategies that have worked, some for me and others for friends/colleagues of mine…here we go.

Close your eyes, then read the name to yourself: Imagine you were a customer or just another web surfer and you came across the name of your company, can you tell the purpose of the company or not? This is an important aspect of starting a company. The first time I tried my hands on building a social network, I experienced the pain of not having a name that related to my business. I had come across cool sites like xoom, joost, twitter e.t.c. and thought those names were notoriously catchy so I indulged. I realized that I hadn’t got the money or track record like these startups to market my company and so all I could do was SEO and use other free marketing mechanisms. I learned that it is very helpful to have keywords you want to optimize for your website placed in the title and name because the search robots like this. Optimization was really slow for me because of this, coupled with my lack of experience with startups at the time. This doesn’t just apply to online businesses either. If I was walking down a road looking for a store I could buy some ‘sick’ sneakers and on my left I see a store called “besnizzled” and on my right I see “house of sneakers”, I will obviously go into the store on my right even though I have never heard of either store before. The fact that their product is in their business name catches my attention …regardless of if “besnizzled” had the best sneakers in the world. In a nut shell, it’s easier if your business name tells people what you do right off the bat.

Is your online presence strong enough?: You must put your business in a position where people feel comfortable patronizing or even window shop with you. The first thing is to make sure your website is not garbage. Your website doesn’t have to be the best designed or most expensive one in the industry but it has to be appealing, it has to be attractive enough to make people want to stay, tell others about it and come back themselves. Make your users able to subscribe to your emails and services, try giving gifts that will be attractive to your customers/fan base e.t.c.

It is also important that you build a community on the web. Exchange links and banners with more patronized websites in your niche. I know most times you will get turned down by a lot of these people but keep trying and ask a lot of sites. I remember I asked collegehumor when I started my college forum site and ofcourse they said no. So don’t take those things personally, just keep asking and you will find atleast one or two. They might not be terribly popular sites, but atleast they have a better google rank and position than you. The more you link, the more attractive your website is to search engine crawlers.

Spread the word: Perhaps the most powerful tool for marketing. I find that a lot of people neglect this tool, advancement in technology has made everyone want to type rather than speak. Most young entrepreneurs will rather spend money of google adwords, affiliate marketing and so forth than actually telling people about what they do in person. I am not saying adwords or affiliate marketing don’t work because they do and they do quite well actually. I am just saying in my position when I started out I didn’t have the money for that so I don’t believe it is the only/best way to go about it. Go around, tell your friends and family about it, and let them tell their friends and so on.

Make flyers, business cards, banners and place them strategic locations where your customer base visit. I once went to a club and I swear I snuck behind the bar and placed a banner with my funny tee-shirt designs right next to the Budweiser banner. It was there all night! All I am saying is, you don’t have to get as crazy as I was but make yourself popular in places where your prospective customer base always patronize.

Be prominent on Social Media sites: If you have a twitter, facebook, stumbleupon, linkedIn, digg account, you are on your way. These are some of the most powerful marketing tools in their own right. Make a lot of friends on these sites, use the power of status of facebook, twit your website name to your followers, share your website and business with all your friends on stumbleupon/digg and have them share with their other friends. Trust me this works tremendously, if done right.

Here is what’s important though, I have learned that it is never helpful if all you do on these social media is submitting your own site. Feel free to always share them with your friends but when you start submitting your site all the time, you start depleting in value, people see you as a parasite, using them for your own benefit. Instead, submit other people’s site in your niche. If your business/site is about photography, submit and stumble or digg other webpages and businesses in this category. Subscribe to them, review them and usually they will return the favor. When they see that you reviewed and submitted their stuff, they are grateful and usually will show their gratitude by doing the same for you. Don’t get too desperate or in a rush to see traffic, it takes time and submitting yourself to achieve this never ever works!

Use Blogs and forums: You do not have to create your own blog or forums even though the former is usually advisable. However bookmark blogs and forums in your niche, visit them regularly and make reviews, comment and make friends there. In time they will get comfortable with you and patronize you. If you are leaving a comment on a forum, you can have your webpage as your signature…it will be seen by everyone anytime you leave a comment. This process is not an immediate source of customers, it takes time. But don’t give up…if you are so quick to give up, then you must re-evaluate whether you are really able to be an entrepreneur.

Track your traffic/customer source: Find out which marketing outlet is bringing you not the most but the ‘real’ customers. Customers that actually hang around and come back regularly. These are the ones you need to focus on anyways, not those who visit for 5secounds and disappear, or those who shoot your bounce rate to the moon. If you are an online business, utilize the google analytics package…it is amazingly useful. If you are an offline business, you can utilize a feedback form. Ask your customers how they like your services and somewhere before your “thank you for patronizing us”, sneak in the “how did you hear about us?” line. Always works.

]]> http://genystartup.com/uncategorized/marketing-your-new-startup/feed/ 1 http://genystartup.com/startup/pitching-your-idea/ http://genystartup.com/startup/pitching-your-idea/#comments Thu, 21 May 2009 03:53:21 +0000 Admin http://genystartup.com/?p=97

I have had the opportunity to be at several startup events where investors of various calibers are present, and the consensus is always the same. Your pitch is the most important part of securing investment. Believe it or not majority of what your 25 page business plan contains is never read by these investors and so it matters little what you try to sell on there especially if you are a new entrepreneur. Ofcourse you need a business plan but what you say or do in the first few minutes of your pitch is what seals your fate more often than not.

Imagine you are an investor, you receive 30-50 business plans every day, most of which are atleast 20 pages long. What would you do? will you carefully read through every line of every page of each plan? That’s what I thought. This is why you must make your pitch a winner.

Undoubtedly it’s almost mission impossible to secure a sit-down with any investor, so your options are limited. If you don’t run into them on a light day in an elevator, you might never see them in person. Emails and phone calls are the only other options, if you don’t have an inside man. I personally think email is the best. 99% of the time if you call, you will either get the machine or the assistant who claims the investor will call you back, but you know that will never happen. When you write your email pitch make sure you cover the basics:

· 1.    – Immediately point out what you want at the beginning. Loads of people who send emails in to investors beat around the bush, talking themselves up or talking the investor up. This is not necessary, actually it could damage your chances. Most times they are checking these emails in the middle of the day’s hustle and bustle from their blackberry. If they see the first two lines lack substance, I am sure you can imagine what they will do next, move on to the next email! So make sure to point out what you want and why you want it from them in the first two lines. If you catch their attention, they will read on and save your email to reply you later.

· 2     -Tell them what your product is about. Site the problem, tell them you have done your research and so and so number of people have this same problem daily. Proceed to tell them that your product/service is the solution and why it is. In a video I watched of investor Chris Sacca, he mentioned what I have heard several investors say, niche problems are not what they look for, be on a larger scale with your venture, this gives you a broader scale to maneuver should your initial idea not work out as planned.

· 3     -While you don’t have to list all your competitors, you should immediately highlight why or how you stand out. Why is your product different? Why is it better? You can list your competitors and do a complete comparison in your business plan, but right now, all that matters is how you differ in 2 lines. They usually don’t have time for more.

· 4     -Tell of your market. Briefly touch on how strong your market is and how you intend to break into it. Investors like this part. They care about how they will make their money and how soon, so if you tell them 1 billion people will benefit from this, they will most likely be more interested than if you say my college campus will benefit from this. Get my drift?

· 5       -Tell them why YOU are the person for this venture. I have found that the best way to do this is by sharing the strength of your team, how capable you are and if you have experience, do not shy away from indication your past successes. They will rather do business with people who have succeeded before than otherwise anyway. If you don’t have any experience, all hope is not lost, just come up with creative ways of showing to this person that your team is more than able.

When I was first business plan for my social networking platform which led to my first sojourn into the world of venture capitalists, I came across a certain website that talked extensively about entrepreneurs who were just starting out and finding their feet in the startup world. I came across Young Entrepreneur. Not only does it provide useful tips for “freshies” (as I like to call them) on a daily basis, it carries a series of interviews with successful entrepreneurs, who constantly share their inspiration, their journey and speak quantitatively about the benefits of being a successful entrepreneur.

The website had a blog and a forum where one can seek help, get advice and so forth from other entrepreneurs around the world. I took advantage of the forum when I needed advice on how to approach VCs and a lot of people had their various ideas and were vastly helpful.

For every young entrepreneur, information is important! You must always be receptive to information and not just any information, good information. My favorite part of the website personally is the university. I have read some amazing articles on there that have changed my perspective on so many things from how to choose a partner to what a business plan needs to have. This is why I have them listed in my blog roll as a site to visit. I encourage you all to bookmark the blog at Young Entrepreneur, visit often, become a member of the community there, because the things you will learn and the people you will meet will most likely turn out to be invaluable.

Believe it or not young entrepreneurs seeking funds are the ones that will feel the effect of the economic downturn the most. With money more difficult to come by these days, even filthy rich investors and VCs know the value of every quarter. They are all being more tight fisted and more careful about who gets their money. Don’t get me wrong there’s still money swimming around Silicon Valley in large quantities. Infact so far in 2009, well over $5billion has invested in several companies in various stages of funding. That is a whole lot of money, however the focus of VCs and angels these past few months had been on companies like twitter, olx e.t.c. companies already in existence and well established. They are quite confident that these companies will bring returns and that’s what every investor seeks at the moment.

One can also look to the several local funds and loans set up by government agencies and private consortium  set up for the sole purpose of helping new companies grow.

I have been talking to a lot of people, reading a lot of books and articles on what new entrepreneurs can do to secure some funding as well and here’s a few things I found:

1.) Build a confident and relentless team. In previous posts I had talked about the importance of having a team rather than go solo. For some reason you are more “attractive” to angels and investors if you have a team in place compared to you being alone. It’s an unspoken rule in silicon valley that the more people who find the idea and venture worthwhile (regardless of if they are part of the project or just admirers), the more worthy the venture is likely to be.

Once you have a team in place, you have to ensure that confidence is instilled in each and every member of that team about the quality of the product you intend to deliver. If the confidence is there, trust me, it shows whenever you talk about your venture and this is always a good quality. Now you’ve also got to make sure you and your team are relentless. Never give up or take no for an answer. I know of an entrepreneur who currently builds gaming platforms on Facebook that required some funding to bring his ideas to life. He spoke to several angel networks and VCs and all he got was no. Did he give up? Did he look for something else to do? No…he and his team pressed on, they sent “thank you for reading through our resume and business plan” letters to all the people that said no, and 3 days later they resent the plans to these people. They kept at this routine 4 times until a Boston based angel had enough and decided to meet with them. 5 minutes into their meeting the “young, hip and game geek” angel was sold and invested several millions in their venture. Now they rake in well over $10million in revenue from the entire social network clientele.

Never give up! You and your team MUST keep at it.

2.) Are you in a business that doesn’t respect the recession? Certain industries thrive and boom whether it’s the recession or not. Technology, science, biotech are only a few examples of sectors that are not really affected by the recession.

3.) Build and use your contacts. I once had the opportunity to sit in on a startup 2 startup conference in California early in May 2009 and a veteran investor was speaking on what he looked for in an entrepreneur. He went on and on, but what really concerned me is if he was interested in investing in a freshie or not. I knew the answer even before he took the microphone so it was no surprise when he said it. I don’t know if he planned on saying it or not but as he went on in his speech he said “the chance of me investing in a new entrepreneur is zero and that is the case with every other investor I know”. He went on to say he only invested based on referrals. This is not news to anyone except new entrepreneurs obviously and that’s the point of this blog.

As much as I will like to say otherwise, your chance as a new entrepreneur to secure funds is pretty much non –existent if you don’t have that inside connection. Build your connections now!

Two days ago I was on the campus of Towson University in Maryland and speaking to a few students who were meeting for their monthly entrepreneurship club event. The most common subject with these people was whether to finish school or drop out in order to pursue their dreams full time. One of the more captivating conversations went like this:

Guy: I am sure you understand what I mean right? I mean you studied chemical engineering but you are doing something completely different. So what’s the point of wasting more money here and not needing what I get in return.

Tolu: (nod my head in agreement), right…

Guy: I just see no point. I have a great idea, a great plan and I am confident in what I have to offer. That’s what you preach after all, no?

The guy in this conversation seemed really smart and looked like he had everything together so one can exactly say he was delusional but he certainly has been watching CNBC way too much. You know how these shows make it seem like most entrepreneurs never went to school or that they didn’t finish school yet they built and run some of the biggest corporations in the world? Yeah, he’s watched and read one too many of those stories, so had most of those kids in that room.

There is no denying the fact that some entrepreneurs never finished school but turned around to write their own amazing success stories…take Bill Gates, Richard Branson, Larry Ellison, Paul Allen e.t.c. as case studies. These men have gone on to hold the most prestigious positions even without a college degree. Yet it is important to understand that these are one in a million success stories for people who have dropped out of school. Before making such a decision you have to understand the benefits of a college degree, you must grasp completely what the real world is like, and most importantly have a backup plan should your business fail (…and businesses do fail, infact more than 8 in 10 startups  fail in their first 3 years for several reasons). The funny thing is that these people who took the gamble and succeeded are the ones that people report about and celebrate but those who fail are too downcast or embarrassed to come share their stories. Everyone enjoys a good fairytale so the media feeds us what we like, you will rarely see the story of the guy who dropped out, tried everything he could to succeed but failed and now works odd shifts loading and unloading trucks to save up enough money so he can go back to college, get a degree and venture into the corporate world.

My advice to that guy that day and to every other entrepreneur in college is this: instead of seeing college as a money grabbing beast that holds you back, why not look at it as a great means to an end and treat it as such. There are so many things you could do in college that will brilliantly set you up for a successful entrepreneurial career. I will discuss a few very briefly and hopefully you can go on and dissect these tips in more detail for yourself.

While you are in college studying your major say Economics, engineering or whatever it is you are in school for, join an entrepreneurship club or form one and get an advisor/mentor who has experience with startups to serve as the leader. This way you are not only learning your trade, you are sharpening your startup knowledge and ultimately building connections…people who can help you in future. That’s why you must make sure you build a relationship with those advisors/mentors you have for your club. They will know you enough to vouch for you in the future when you need funding or whatever.

College is the perfect place to build and grow your team. If you get a cofounder and a few others that will be on your startup team, the months you spend in college gives you enough time to learn about each other, know each person’s strengths and weaknesses and most importantly perfect your idea.

Make the most of the vast diversity of the student body. Meet as many people as possible and go out to entrepreneurship fairs. I always notice smiles on the faces of investors and entrepreneurs at these sort of events when they see young, driven college students show up and ask questions. They don’t like you enough to throw their money at you…yet. They just like your spirit and desire right now, but the more you keep asking them questions, talking to them about their experiences, the more the open up and get used to you. Before you know it they are on your blackberry and that’s a potential reference or even investor right there.

]]> http://genystartup.com/startup/to-entrepreneurs-in-college/feed/ 4